Rating Corporate Sustainability the Right Way

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’10 most sustainable countries in Africa’

’50 most sustainable corporations in the world’

‘100 most sustainable companies in the Universe’

It is now often common to see the above awards/classifications on almost every sustainability sites or in sustainability publications. These ratings are mostly intended to distinguish sustainable businesses from those that are not, however, most ratings fail to achieve this aim as most popular ratings all share the key limitation of not connecting their key performance indicators (KPIs) to the broader sustainability context in which companies operate. Although accurate Sustainability ratings should evaluate companies on the basis of KPIs that address different economic, environmental, and social issues, they must also align them with the broader sustainability context in which the company operates.

To construct a corporate sustainability rating, we need to:

  1. identify the KPIs used in the index;
  2. link those KPIs to the broader context;
  3. normalize the data to avoid comparing apples and oranges;
  4. determine the relative weights of the KPIs; and
  5. combine the individual KPIs to form the overall rating.

Clearly, all of this needs to be supported by high-quality data.

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